Please use this identifier to cite or link to this item:
Gehrig, Thomas
Stenbacka, Rune
Year of Publication: 
Series/Report no.: 
CESifo Working Paper 882
We demonstrate how endogenous information acquisition in venture capital markets creates investment cycles when competing financiers undertake their screening decisions in an uncoordinated way, thereby highlighting the role of intertemporal screening externalities induced by competition among venture capitalists as a structural source of instability. We show that uncoordinated screening behavior of competing financiers is an independent source of fluctuations inducing venture investment cycles. We also empirically document the existence of cyclical features in a number of industries such as biotechnology, electronics, financial services, healthcare, medical services and consumer products.
venture capital
investment cycles
Document Type: 
Working Paper

Files in This Item:

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.